Definitions for "Section 125 Plan"
Keywords:  irs, spending, stipulates, dollars, pre
A term used to refer to flexible benefit plans. The reference derives from the section of the IRS code, which defines such plans and stipulates that employee contributions to such plans may be made with pre-tax dollars.
a benefits plan that, when established to meet the IRC Section 125 requirements, allows employees to freely choose from a "compensation menu" that includes both taxable and nontaxable items without rendering the nontaxable items subject to income tax
A plan that provides flexible benefits that qualifies under the IRS code to allow employee contributions with pre-tax dollars.